Bosnia and Herzegovina's High Representative has told the Organization for Security and Cooperation in Europe that the country has successfully established the rule of law but still faces severe economic problems.

The European Union Special Representative to Bosnia and Herzegovina, and the country's High Representative, Paddy Ashdown, says the country now has a state court, a criminal code as well a special unit of the police to deal with organized crime.

Authorities can freeze assets of those who support war criminal networks and the next stage, says Mr. Ashdown, is "to lock away all those who held Bosnia to ransom for so long." Mr. Ashdown adds there are still big economic problems.

"If there is a worry that I have about the future, it is that the economic basis for Bosnia's economic success, survival even, after the aid flows have diminished is seriously at risk unless we conduct an aggressive and very fast process of reform," he said.

Mr. Ashdown says one problem is that too much money is being spent on bureaucrats and politicians and not enough on education and jobs.

He points out that Bosnia and Herzegovina, with a population of just under two million people, has 11 prime ministers, just as many ministers of the interior, 11 ministers of health and 11 ministers of education.

Despite his concerns, Mr. Ashdown is hopeful the country, known locally as BiH, is on the right road.

"Where we are now in BiH is coming out of the post-conflict era and moving into what I will call the pre-transition era," he said. "Somewhere up ahead of us in the next six or eight months is the entrance to the transition tunnel, the other side of which is Europe. More and more the issues we deal with in Bosnia and Herzegovina are not issues of conflict. They are issues about establishing a judicial system, establishing a post-communist command economy, the rules governing a market economy, establishing clean political space and building a civil society. All these issues we know how to deal with and we have dealt with them in Poland and Hungary and in a sense the worst of Bosnia's journey is now behind us."

Mr. Ashdown is a former leader of the Liberal Democrats in the British House of Commons.